* demos (δήμος) meaning "people"
* kratos (κράτος) meaning "rule" or "power"
Therefore, "democracy" literally means "rule by the people."
It's important to note that Ancient Greek democracy wasn't exactly like modern democracy. It was a direct democracy, where citizens participated directly in government. This was possible because the population of Athens, the city where this form of government flourished, was relatively small. Modern democracies are typically representative democracies, where citizens elect representatives to make decisions on their behalf.
However, the concept of popular sovereignty, the idea that political power ultimately rests with the people, was first established in Ancient Greece and is a fundamental principle of democracy today.